Shares of KPIT Technologies Ltd have turned into multibagger in the last three years. The IT stock, which closed at Rs 113.45 on October 12, 2020 was trading at Rs 1201 in the current session, delivering 962% returns during the period. An amount of Rs 1 lakh invested in KPIT Technologies stock three years ago would have turned into Rs 10.57 lakh today. In comparison, Sensex has risen 63.44 per cent during the period. The stock touched its all-time high of Rs 1237.80 in the last session (October 12, 2023). It fell to a 52-week low of Rs 615.40 on October 19, 2022.
At 2:42 pm today, KPIT Technologies stock was trading at Rs 1200 against the previous close of Rs 1212.05 on BSE. Market cap of the firm stood at Rs 29,729 crore. Total 0.44 lakh shares of the firm changed hands amounting to a turnover of Rs 32,901 crore on BSE. The stock has a beta of 0.7 in the last one year, indicating very low volatility.
In terms of technicals, the relative strength index (RSI) of KPIT Technologies stands at 62, signaling the stock is trading neither in the overbought nor in the oversold zone. KPIT Technologies shares are trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day and 200 day moving averages.
In a year, the stock has gained 80.19 per cent and risen 72.43 per cent this year.
Returns of Peers
The firm has outperformed its peers when it comes to returns to shareholders during the last three years. While L&T Technology Services stock zoomed 162 per cent, Persistent Systems shares climbed 324.30 per cent during the period. Shares of another IT services firm Coforge have rallied 80.09% in the last three years.
Financial Performance
The rally in the stock can be attributed to strong earnings of the firm.
KPIT Technologies reported a 53.37 percent year-on-year increase in net profit to Rs 134.43 crore for the first quarter ended June 2023 against Rs 85.4 crore in the June 2022 quarter. Net profit rose 20.48 percent from Rs 111.6 crore from March 2023 quarter. Consolidated revenue from operations jumped 60 percent to Rs 1119.1 crore over last year and 7.89 percent over the last quarter in the June quarter of FY24.
KPIT Technologies reported a 7.2% rise in net profit for the quarter ended March 2023 on a quarter-on-quarter basis. On a year-on-year basis, net profit rose 38.60% to Rs 111.58 crore. On an annual basis, revenue zoomed 39% to Rs 3365 crore in FY23 against Rs 2432.38 crore in the previous fiscal. Net profit rose 40% to Rs 386.86 crore in FY23 against Rs 276.24 crore in FY22.
The IT firm logged a consolidated net profit of Rs 104 crore in the December 2022 quarter (Q3 FY23), up 48 per cent from Rs 70.3 crore in the same quarter a year ago. The company's revenue from operations rose to Rs 917.11 crore in Q3 FY23, a year-on-year (YoY) growth of 47 per cent from Rs 622.36 crore in Q3 FY22.
Sales climbed 47.36% to Rs 917.92 crore in the last quarter against Rs 622.37 crore in the corresponding quarter of the previous fiscal. EBITDA rose 45.19% to Rs 166.94 crore in the December quarter against Rs 114.98 crore in the corresponding quarter of the previous fiscal.
In the second quarter of the last fiscal, the firm reported a profit of Rs 83.48 crore against Rs 65.10 crore in Q2 of FY22.
Revenue from operations rose to Rs 744.crore in Q2 compared to Rs 590.87 crore in the corresponding period of last fiscal.
Net profit rose 39% to Rs 381 crore in the fiscal ended March 2023 against Rs 274.23 crore in the March 2022 fiscal. Sales climbed 37.46% to Rs 3405 crore in the last fiscal against Rs 2477.15 crore in the March 2022 fiscal.
On a yearly basis, net profit zoomed rose 87.65% to Rs 274.23 crore in the March 2022 fiscal against Rs 146.14 crore in the fiscal ended March 2021. Sales rose 19.48% to Rs 2432.39 crore in fiscal ended March 2022 against Rs 2035.74 crore for the fiscal ended March 2021.
Here’s a look at what analysts said on the outlook of the stock.
Vaishali Parekh, AVP- Technical Research & Analysis at Prabhudas Lilladher said, “The stock has once again indicated a higher bottom formation pattern on the daily chart and with a pullback witnessed has moved past the significant 50EMA level of Rs 1132 zone to improve the bias and further rise is anticipated till in the initial targets of Rs 1270. The near-term support can be maintained near Rs 1132 levels and upside for the short term can be expected at Rs 1360-1400 levels as the target, provided a decisive breach above Rs 1270 is confirmed.”
Gaurav Bissa, VP, InCred Equities said, “KPIT Tech has been in a strong uptrend since 2020 and managed to outperform the IT index since the last few years. The stock has been taking support from Williams Alligator indicator throughout its journey and is on the verge of a fresh consolidation breakout on the weekly charts. The stock can test Rs 1500 levels on a weekly close above Rs 1520 levels. The stock has been witnessing bearish divergence in RSI on the weekly charts which suggests the price will get a boost once RSI trades above 66 levels which will result in a weekly breakout.”
Abhijeet from Tips2trades said, "KPIT Technologies is bullish on the daily charts and a daily close above the resistance of Rs 1234 could lead to a target of Rs 1330 in the near term. Support will be at Rs 1165."
Goldman Sachs maintained a 'buy' rating on the IT firm and raised its share price target to Rs 1,420 from Rs 1,270.
HSBC Global Research has initiated coverage on the KPIT Tech stock. It has assigned a target price of Rs 1,535 with a buy rating.
KPIT is in the middle of a once-in-a-generation investment cycle by auto OEMs. The auto specialist benefits from surging demand for software related to electrical vehicles (EV), autonomous driving and connected vehicles, said HSBC Global Research. The brokerage cited risks such as client and business concentration and structurally lower margins for the company.
About KPIT Technologies
KPIT Technologies Limited is a technology company, which is focused on automobile engineering and mobility solutions. The company offers electronic and mechanical engineering solutions to its customers. It also analyses data for diagnostics, maintenance and tracking of assets and related connectivity solutions, including data and analytics beyond embedded or mechanical engineering and their connectivity and integration with back-end information technology (IT) systems and platforms for the automobile and mobility sector.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
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